Prescriptions for Economic Growth
There are a lot of theories (and thus, prescriptions) on what leads to a country’s economic prosperity. In Missing in Action , Pranay Kotasthane evaluates the most popular of such theories. Economic freedom : This consists of open markets and less government in economic matters, labour reforms, low tax rates, and ease of doing business. This certainly describes the West. And since the West funds international organizations, the IMF and World Bank push for such policies when they give aid. But there are too many exceptions to this policy – South Korea and Taiwan became rich by focussing on exports while making it hard for foreigners to sell; and the South Korean banking system was largely government owned. Many countries that have followed these prescriptions have failed, from Argentina to Greece to South East Asia at different points. Political freedom and institutions : This refers to individual rights, property rights, and judicial effectiveness. That certainly i...